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GeniusBabies.com: Making It Big With Limited Cash and Technical Know-How (Part II)
Michelle Donahue-Arpas pursued her two passions on the Web -- staying at home with her baby and pre-natal or infant stimulation.  She proves that you can make it big on the Web even with little cash and limited technical expertise, as long as you have guts and determination.

by Isabel M. Isidro
Managing Editor

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Can You Describe Your E-commerce Strategy?

We tried to stay with our niche, and expand our product line within that niche. We did not have the money to spend on marketing, so we relied on our customers returning, and those same customers being so impressed with the personal touch, that they would tell others. What we found was that the personal notes and thank you messages that we include in every order shocked many people. They were amazed there were "real people" on the other end. If they had a question or concern, we address them kindly and promptly.

A major turning point of our business is when I decided to ditch our original web site and to bravely do it my own, and set up a Yahoo! store. The common joke was that " I didn't know a URL from an SUV!" I did not know HTML.

I copied and pasted all our product's images, descriptions. Actually, no, I do not think I copied and pasted, because I did not even know how to copy and paste. I think I literally typed every single word into that new site. These are embarrassing things to admit, but it is so true.

And when I saw Yahoo store, I had looked at the test site. And even I could do that myself. I was like, "boy, oh boy. This is like a web store for dummies here." And it didn't looked as pretty as the other site did, but it worked! It has shopping cart that worked, it was very organized and I no longer had to call the webmaster and say "this link does not work, and this link does not work." And then you wonder when he's ever going to call back. And when he comes to fix it, it's $75 an hour! Now when I realize it, little things like putting in a link or something, that it takes only three milliseconds. But he charged me $75 for something that could be done so easily. But then again, how should I know?

I have since used web designers to polish and upgrade the site to the more professional appearance it has now. But I maintain the site myself, and really appreciate the autonomy that it gives me. It was a great freedom to be no longer beholden to a web designer, and to be billed for every change on the site.

How do you manage your inventory?

It's still manual. We do not have a computerized inventory system. We just watch and keep our products stocked as much as we can. The site gives off an automatic alert when the stock is down to 12. We do not keep anything on the site that is out of stock.

We do not want our customers to face the nightmare that others who shop online experience. In gifts especially, you would normally order it online ahead of time. If two weeks later you don't even have a shipping confirmation, you begin to worry if this order arrived in time? Or when can I have my shipping tracking code? Then after two weeks of waiting, they tell you, "Oh, that's still out of stock."

How do you manage order fulfillment?

We do everything ourselves, including fulfillment. We do not want to outsource. I have my hands on everything. I worry very much if the growth continues the way it is. How you can possibly give this kind of service if it isn't really in your heart and you're not hands-on? I don't know. I would think it would lose some of the customers that we have now.

Kindly describe your customer relations strategy.

Our business has blossomed-- thanks to our wonderful and loyal customers. It is much more difficult to give the personal touch when there's 50 or 100 orders a day, than it was when there were 10 or 12. But no matter, I see to it that all inquires are replied to promptly. If we see that someone has selected to pay for Next Day Air Shipping for $30 to ship to North Carolina, and we can send it by Ground, as we're in Charlotte, we immediately reduce their charges to $6.95 and inform them through email.

It is all the little things; a grandma needs a 1st birthday gift for her grandbaby across the country. We will make it certain that it arrives on time, and send a little extra. Then, email Grandma and show her the tracking and delivery confirmation, to assure her that her special gift arrived on time.

The personal touch continues with complimentary gift-wrapping and bow, like you would wrap yourself, and a handwritten gift card, instead of an impersonal computer generated text on the packing invoice.

Everybody who comes in from Yahoo rates us. If you lose your rating, you won't even stay on Yahoo, which is great. A 5-star rating means having a 95+% excellent rating in customer care.

How do you handle competition?

Well, we had a lot more than we had now. Basically, in our market there is only one major player - BabyStyle.com. In the last year or so, iBaby.com, which was the biggest one, went under. BabyGear.com went under and BabyCenter just went under. EToys is also gone. We've seen a tremendous increase in traffic because folks are looking for somewhere to buy. And I think what's nice is that all of us small etailers get a bigger piece of the pie when all the big guys leave.

Do you have any investors?

No, we never had any and we do not have one even today. You can count my mom who loaned us $2000 here and $5,000 there and we'd pay her back the same month. Things were tight! Never did we go to any kind of debt. I'm so glad that we did it that way. I think that has been a great help.

We reinvested every single cent that we earn. I took like a pittance of an allowance, just to have my own money to go to the grocery store and buy diapers.

We've taken a few steps back in these past few months. We discontinued international shipments. We had so much loss, and saw so much fraud, causing disappointment in many people. They would receive a big package and be so excited about it and it would be filled with French newspapers and books. We can't ensure that the goods will arrive safely. Even in countries that used to be safe like France, we've experienced that the packages have not arrived safely. We just couldn't afford the losses.

After three years, we now feel more relaxed. With no international orders to worry about, we're not working as hard to promote the site. I'm not working now until 2 a.m. on the computer. We're leading a more normal life. To us, it was a luxury to watch a movie and it didn't happen for the last three years. We're not working 24 hours a day anymore.

Some people go out there and spend a fortune on inventory. And I say noooo! First, build the traffic. I started out with 10 gift packages. Now we have over 700 items that we sell and we could continue to expand but we are looking for something special. We test it out with our family and friends; even our neighborhoods test it out. We have to really love the things before we sell them. Now, this year we'll have over a million visitors. But it doesn't seem that too long ago when I was thrilled to have 50 visitors a month.

We start making these goals that this month we'll have a 100 visitors. Then 500. We used to set the same goals for how many orders they would do. We now do 1200 orders a month. We have a number in our mind that if we get to this particular number, then my husband can resign. And boy that came fast!

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